Condoleezza Rice's recent televised address emphasised, for those that didn't
know, the huge correlation between economic non-performance and poverty on the
one hand, and social unrest and terrorism on the other.

So George Bush's ten-day sojourn through Asia, via Japan and Australia, the
doormen on either side of the route, and the doormen to global/US policies in
the region, is awash with intrigue, plot and sub-plot. For investors eyeing
the region, this might well be the beginning of much greater economic integration,
the primary long-term tool in undermining poverty and terrorism.

Ultimately, for those who see it that way, this spells opportunity as Asian
economies begin to build the scale required for integration to be meaningful.

'Fly on the wall' status will have much value as discussions take Bush from
economic co-operation to counter-terrorism. Asia now offers the 'Yanks' a lot
more than electronic exports and exotic cuisine.

Despite the debacle of the early 1990s when East Asia went through boom and
bust, this time it is powered by China. Perhaps only one-tenth of the US economy
today but there is always a tomorrow.

Inroads

The New Asia is making significant inroads as part of the flip side of the
globalisation argument (the one that assumes that large western companies control
wealth without passing bucks on to the poor).

Take HSBC's news emanating from the UK where some 4,000 jobs are being lost.
The loss is to the benefit of Apec members as jobs are reallocated into call
centres in India, China and Malaysia.

The fact that Indians are paid between one-tenth and one-quarter of their UK-based
counterparts for answering the phone, gives you the justification for the biggest
demographic movement in financial services history.

Now add in the stats on those Asian bourses below from the all-conquering Thai
index, the Bangkok SET, stands at +65.11 per cent year-to-date (77.63 per cent
over five years), the Indonesian JCI at +52.87 per cent year-to-date, Singapore's
Al Equity Index at 39.46 per cent year-to-date, and Philippines SE Composite
+34.26 per cent year-to-date. All of them doing well, and all four of them included
in Bush's road show.

The list of US allies on the "thank you for your support" tour is
a list of countries beginning to grow their own sources of wealth creation,
and looking to the US to support and promote continued wealth development. If
that happens, this will be a watershed tour in regional economic history. If
the indices continue to rise over the next few years the chances are that this
tour will be looked back on as a major defining moment.

So, is US, Apec and Asian economic integration do-able? Two sides of the argument
as always. Side one: no. This will be led by anyone taking the view that Apec
is an irrelevant body, a showpiece without substance.

They may have a point. Apec is put together on a shoestring budget of $3.5
million; that's nothing for many corporate executives reading this piece.

They employ only 40 people and their resources are naturally quite limited.
Piamsak Milimtachinda of the Apec Secretariat agrees, and is quoted as saying
"Apec needs vision and focus, and it needs to actively manage a wide range
of inter-related groups if it is to live up to its potential". Tasks not
suited to small budgets.

The yes school of thought will be led by those taking the view that globalisation
is inevitable. It only needs to be sold as a product that benefits both sides
of the world: the rich and the poor; the North and the South.

Statistics

They will point to statistics which show that lots of industries (financial
services, electronics, the hotel industry) are integrating at a rate of knots.

They could quote State Street Corp, the world's largest custodian bank, which
says that money flowing into Asia this year is at an all-time high, or the highest
since data was collected in 1994, as a suggestion that other industries will
increasingly see opportunity in Asia.

They might also quote the most recent World Bank report on East Asia: "If
the momentum of reform can be maintained, the region should be well placed to
convert cyclical recovery into more sustained long-term growth". Continued
long-term growth essentially means increasing integration into global economics
and global markets.

A few years ago it was usual to see Asian and emerging market stocks between
5 and 10 per cent of a western pension fund or a global equity portfolio. Today,
there is increasing evidence that risk rating and portfolio holdings for Asian
economies need review.

The indices show that the Tiger is back. When Thaksin Shinawata, the Thai premier,
opens the Apec conference, he intends to bill it as a watershed moment in history.
Among his guests are Koizumi of Japan, Putin of Russia, and Bush.

A notable bunch of performers seemingly there to make the statement that this
time it is in the world's interest to allow the Asian boom, as reflected in
these indices, to continue and grow. If that happens, the 5 to 10 per cent will
look a little light.